Intellectual Property Considerations for Family Businesses by Maayan Perel, Esq.

What’s In a Name?

What to consider before naming your business after a family name

Maayan Perel, Esq.

So, you have finally reached the exciting point of choosing a name for your business.  Congratulations!  In this hectic sage of endless concerns, which includes honing your business ideas, researching your potential market, building your marketing strategy and raising the capital necessary to turn your ideas into reality, naming your business appears to be a rather fun and light-hearted step.  However, before you go and pick your own first or last name as your business’s name – either because this seems to be the easiest and most natural choice, or because you hope to build a legacy and be remembered through your business – you should consider certain intellectual property issues that are implicated in naming your business after yourself.

As a general matter, whatever name you end up adopting for your business, you want to be able to protect it as a trademark.  In order for a name to be protected as a trademark, the name must be able to indicate the source of the product/service bearing such name, or in other words it must be “distinctive.”  Indeed, distinctiveness is one of the three things the United States Patent and Trademark Office (the “PTO”) will evaluate about your mark to determine its suitability for registration (the others are Likelihood of Confusion and whether the mark is scandalous or immoral).  Why? Because the PTO does not want to grant exclusive rights in a mark that others should have the ability to use freely.

When assessing whether your choice of a name for your business should be found sufficiently distinctive to be protected as a trademark, consider the following four categories of potential trademarks, from least easily protectable to easiest to protect: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful:

  • A Generic mark is basically a common noun that actually refers to the product/service category, e.g., SUNGLASSES TRADING for a business retailing sunglasses.  No one can claim intellectual property rights and exclude others from using a generic mark, and there is no way for a generic mark to acquire distinctiveness.
  • A Descriptive mark is an improvement over a generic mark, as it affords some additional information.  If a descriptive mark merely adds information that would apply to other examples of the product/service, e.g., AFFORDABLE SUNGLASSES TRADING for a business retailing sunglasses, it will be considered “merely descriptive” and will be found ineligible for trademark registration.  For a merely descriptive mark to be entitled to trademark protection, it must be shown to have acquired “secondary meaning.”  That is, the user of the mark has to show that consumers, over time, have come to associate the merely descriptive mark with that user’s particular brand as the source of goods/service.  Usually, it takes about five years of substantial, exclusive, and continuous use for a merely descriptive mark to acquire sufficient distinctiveness to warrant registration.
  • A Suggestive mark alludes to some aspect or characteristic of the product/service, but in a distinctive way, e.g., SUNNYBEACH TRADING for a business retailing sunglasses.  This mark suggests that the business sells beach accessories in a way that goes beyond merely describing the business as trading sunglasses.  A mark held to be suggestive is considered sufficiently distinctive to merit immediate protection; no showing of acquired distinctiveness is necessary.
  • Finally, a Fanciful or Arbitrary mark is the most distinctive, and therefore gets the most robust trademark protection.  A Fanciful mark is a made-up word, e.g., NIKE for sportswear.  An Arbitrary mark is an existing word that has no relationship to the product/service it is used to designate, e.g., APPLE for computers and electronic gadgets.  Fanciful or Arbitrary marks receive protection from the moment they are adopted (so long the user is the first to use the mark).

The use of surnames as source indicators is Descriptive.  Accordingly, it is not subject to immediate trademark protection.  The rational behind this principle is that “surnames are shared by more than one individual, each of whom may have an interest in using his surname in business.”  Generally, to be able to register your surname as a trademark, your customers must recognize your surname as principally identifying your business and not as primarily referring to yourself or any other person with that surname.  Establishing such recognition may take quite a long time; indeed you will probably be required to show about five years of substantial, exclusive, and continuous use to turn your surname into a registrable mark.

Nevertheless, there maybe instances where registration of a surname will be allowed, even without a showing of long and exclusive use.  Section 2(e)(4) of the Lanham Act (the law governing the registration of trademarks) allows registration of all terms otherwise registrable under the Lanham Act, but excludes terms that are “primarily merely a surname.”  The language “primarily merely a surname” intends to avoid instances where your choice of name for your business will be held unregistrable just because it happens to be the surname of an individual in a telephone book or city directory.

Basically, there are five relevant factors that can assist you in determining whether your name is primarily merely a surname, and thus, unregistrable:

  1. Whether the surname is rare;
  2. Whether it is the surname of anyone connected with you or your partner/s;
  3. Whether it has any recognized meaning other than as a surname;
  4. Whether it has the “look and feel” of a surname; and
  5. Whether the stylization of lettering is distinctive enough to create a separate commercial impression.

These factors should be examined, though, according to the name’s primary significance to the consumers.

  • So, let’s try to wrap up this discussion and develop some practical tips:You are better off choosing a Fanciful, Arbitrary or Suggestive name for your business.  In this way you can ensure your business’s name will receive immediate trademark protection; your competitors will therefore be excluded from using this name or any other name that resembles it in such a way that would potentially confuse consumers.
  • You should not adopt your own name as your business’s name if you have a very common name, e.g. SMITH.  Such a name will be found, for the most part, as merely a surname and would be refused registration as a trademark.  Having a common surname and still anxious to be remembered forever through your business?  You can either: (1) use your name in a substantial and continuous manner to be able to show the USPTO that it has acquired a secondary meaning as your business’s designator; or (2) just donate a bench in the park under your name – this is definitely a less bothersome strategy for leaving something memorable behind you…
  • You can adopt your surname as your business’s name if it is rare, e.g. BAIK; if it is has a different recognized meaning, e.g. PEARL; if it does not have the “look and feel” of a surname (so consumers are likely to believe it is a coined term), e.g. GARAN; and, if you style its lettering in a distinctive way.
  • Before making your final decision, be sure no one else has adopted your name for his or her similar business before you (e.g., if your surname is McDonald and you opened a fast food business, DO NOT adopt it as your business’s name).  For this matter, you can conduct an independent trademark search on the USPTO’s user-friendly online database.
  • Finally, whatever name you eventually chose for your business, be sure to put your efforts into registering it with the USPTO to obtain trademark protection.  The last thing you want is to watch your competitor choosing a similar name for his or her business and free riding on your reputation, without having a legal remedy.

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